Reader's Watchdog: Costly legal battle ends in frustration

Legal question still unresolved after thousands spent

Mar. 11, 2012

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The question from Don Jayne seemed reasonable enough: Can someone who isn’t a lawyer represent a corporation in a legal matter before the Iowa Court of Appeals or the Iowa Supreme Court?

The reason the retired West Des Moines businessman cares? He had to hire a lawyer to take on the head of a company who represented himself in court appeals, costing Jayne thousands of dollars.

Unfortunately for Jayne and his court opponent, Michael Foust — who have spent half a decade and thousands of dollars in a legal battle — the answer from Iowa’s judicial system to the Des Moines Register Reader’s Watchdog was: It depends.

The story began in 2006 when Jayne balked at paying for some cement and garage work done at his home by Timberline Builders Inc.

He contended the contractor ignored his written specifications for the project, which, when completed, wound up violating city code. He wanted the work fixed.

“A contractor who does not meet specifications is like an auto dealer who delivers a Chevrolet after you bought a Ford,” he said.

The company responded by putting a mechanic’s lien on Jayne’s home for $28,812 in 2007, and the company’s owner argued the work did not violate city code. But in 2008, a judge awarded Jayne $4,500 in attorney’s fees and the company was ordered to do corrective work.

Later in 2008, Judge Douglas Stovall changed his ruling, ordering Jayne to pay $11,000 for part of the work, and Foust to pay the attorney’s fees.

In the ensuing years, Jayne said he not only had to have the work redone at a cost of $5,880, but he also had to spend more money as the court battle over the still-standing mechanic’s lien progressed. The cost to both sides by this time already surpassed that of the construction project.

In 2009, Foust decided to handle his own appeal to the Iowa Supreme Court — an unusual move for the head of a corporation.

“At that point, I was cash-strapped,” he said.

Foust said it bothered him that small businesses like his had the right to represent themselves in small claims court, but had to hire an attorney if the cost of the claim exceeded $5,000.

The high court typically had held that a corporation may not represent itself “through non-lawyer employees, officers or shareholders.” One reason was that other shareholders in the company could be adversely affected by one officer’s representation.

In June 2010, the Supreme Court left the question of whether a non-lawyer could argue an appeal to the appeals court to decide. That court found Foust was no exception to the non-lawyer rule and gave him 30 days to hire an attorney.

Foust filed an application to have that decision reviewed by the Supreme Court, which was his right under state law, according to Rebecca Colton, a spokeswoman for the court.

Foust even tried to submit a brief to the U.S. Supreme Court, but he said it was rejected because he could not find a lawyer willing to submit one on his behalf.

Iowa’s Supreme Court opted not to hear the question of whether Foust could represent his corporation and again sent the case back to the appellate court, which again said Foust was no exception and gave him more time to hire a lawyer.

In the end, Foust’s company was ordered to dissolve its mechanic’s lien against Jayne. But in an ironic twist, Foust had to hire an attorney to collect from Jayne.

After the case concluded late last year, Jayne wrote a letter to Supreme Court Justice Mark Cady. Jayne said the court did not raise the issue of Foust’s role until March 2010, which cost Jayne more money.

“How am I to recover the costs which I have incurred from this charade?” he wrote, pointing to about $60,000 in legal fees. “My attorney had applied for sanctions three to four times, to no avail.”

Cady didn’t respond, so Jayne filed a complaint for the “unauthorized practice of law.”

Spokeswoman Colton said the court has found in the past that there can be compelling reasons in rare cases to justify non-lawyer representation. Unfortunately for both Jayne and Foust, however, neither the Legislature nor the high court has articulated when doing so would be appropriate.

Colton said one of the key factors in this case was that Jayne’s attorney could have raised the non-lawyer issue when the appeal first came to the attention of the Supreme Court in 2009, but she did not.

Jayne has since suggested future problems could be avoided for Iowans if lawyers were required to record their identification numbers on appeal documents. The numbers would alert clerks to non-lawyers, who have no such numbers.

Colton said that will likely happen “when we have electronic filing around the end of this year or early next year.”

But Colton said the court still would have needed more information to resolve the question of whether a non-lawyer can represent a corporation, because it is not a hard-and-fast rule.

As for the court’s failure to respond to Jayne’s concerns, Colton said that was her fault. Cady, she said, “gave me the letter, and I misplaced it. I cannot find a response in my file, and I’m to blame for that. The case was completed, and there wouldn’t have been a problem with ex parte communication,” she said.

Since the court tussle, the clerk of the Supreme Court has asked her staff to keep an eye out for non-lawyer representation earlier in such cases, Colton said.

“But right now, the way the law stands, such matters still require a review of the court,” she said. “That takes time, and that’s why this appeal took so long.”

Foust said he wasn’t trying to bleed Jayne, but the case got “out of control.”

“It cost him a lot of money, and it cost me a lot of money,” he said. “The thing is, it was never resolved. I wish I could get it back into court right now.”

Lee Rood’s Reader’s Watchdog column attempts to find answers and accountability for Iowans. Contact her at lrood@dmreg.com or by calling (515) 284-8549. To read past columns, go to DesMoines Register.com/readerswatchdog.